Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549


(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2001

                                       OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

For Quarter Ended December 31, 2001


                              TRANSNET CORPORATION
             (Exact name of registrant as specified in its charter)

    DELAWARE                                       22-1892295
(State or other jurisdiction of           (IRS Employer Identification Number)
incorporation or organization)

45 Columbia Road, Somerville, New Jersey            08876-3576
(Address of principal executive offices)           (Zip Code)

Registrant's Telephone Number, Including Area Code:908-253-0500

----------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

    Yes    X      No ______

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of February 11, 2002: 4,774,804.




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                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS


                                                                     Page No.


PART I.  FINANCIAL INFORMATION

   Consolidated Balance Sheets
      December 31, 2001 and June 30, 2001                               1

   Consolidated Statements of Operations
      Three Months Ended December 31, 2001 and 2000                     2
      Six Months Ended December 31, 2001 and 2000                       3

   Consolidated Statements of Cash Flows
      Six Months Ended December 31, 2001 and 2000                       4

   Notes to Consolidated Financial Statements                           5 - 6

   Management's Discussion and Analysis                                 7 - 9

PART II.  OTHER INFORMATION                                             10






























                                       i.


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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------



                                                       December 31,  June 30,
                                                          2 0 0 1     2 0 0 1
                                                        [Unaudited]
Assets:
Current Assets:
  Cash and Cash Equivalents                             $2,197,513  $6,301,210
  Accounts Receivable - Net                             10,842,922   7,566,102
  Inventories                                            2,439,844   1,886,988
  Mortgage Receivable - Related Party                      250,000     250,000
  Other Current Assets                                     133,814     125,358
  Deferred Tax Asset                                       101,406     256,055

  Total Current Assets                                  15,965,499  16,385,713

Property and Equipment - Net                               594,441     530,969

Other Assets                                               229,678     235,469

  Total Assets                                          $16,789,618 $17,152,151

Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                      $  718,231  $  674,896
  Accrued Expenses                                         210,061     720,851
  Accrued Payroll                                          213,415     220,551
  Floor Plan Payable                                     1,939,224   2,229,152

  Total Current Liabilities                              3,080,931   3,845,450

Deferred Tax Liability                                      29,704      29,704

Stockholders' Equity:
  Capital Stock - Common, $.01 Par Value,  Authorized
   15,000,000 Shares; Issued 7,469,524 Shares
   [of which 2,694,720 are in Treasury at
   2001 and 2,614,200 in 2000]                              74,695      74,695

  Paid-in Capital                                       10,686,745  10,686,745

  Retained Earnings                                     10,225,743   9,823,757

  Totals                                                20,987,183  20,585,197
  Less:  Treasury Stock - At Cost                       (7,308,200) (7,308,200)

  Total Stockholders' Equity                            13,678,983  13,276,997

  Total Liabilities and Stockholders' Equity            $16,789,618 $17,152,151


See Notes to Consolidated Financial Statements.



                                        1

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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------


                                                            Three months ended
                                                               December 31,
                                                           2 0 0 1      2 0 0 0
Revenue:
  Equipment                                              $9,875,110  $9,574,559
  Service                                                 4,562,967   3,538,739

  Total Revenue                                          14,438,077  13,113,298

Cost of Revenue:
  Equipment                                               9,253,066   8,736,876
  Service                                                 3,100,202   2,644,419

  Total Cost of Revenue                                  12,353,268  11,381,295

  Gross Profit                                            2,084,809   1,732,003

Selling, General and Administrative Expenses              1,815,979   1,633,680

  Operating Income                                          268,830      98,323

Other Income:
  Interest Income                                             9,406      68,067
  Interest Income - Related Party                             5,672       5,672

  Total Other Income - Net                                   15,078      73,739

  Income Before Tax Expense                                 283,908     172,062

Income Tax Expense                                          107,885      53,000

  Net Income                                             $  176,023  $  119,062

Basic Net Income Per Common Share                        $      .04  $      .03

Diluted Net Income Per Common Share                      $      .04  $      .02

Weighted Average Common Shares Outstanding - Basic        4,815,872   4,850,141

Weighted Average Common Shares Outstanding - Diluted      4,990,710   4,925,141


See Notes to Consolidated Financial Statements.



                                        2

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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------


                                                             Six months ended
                                                               December 31,
                                                           2 0 0 1      2 0 0 0
Revenue:
  Equipment                                             $23,069,269 $19,725,160
  Service                                                 8,445,198   7,053,137

  Total Revenue                                          31,514,467  26,778,297

Cost of Revenue:
  Equipment                                              21,790,795  18,199,165
  Service                                                 5,666,436   5,166,191

  Total Cost of Revenue                                  27,457,231  23,365,356

  Gross Profit                                            4,057,236   3,412,941

Selling, General and Administrative Expenses              3,486,115   3,241,777

  Operating Income                                          571,121     171,164

Other Income:
  Interest Income                                            43,343     135,820
  Interest Income - Related Party                            11,344      11,344

  Total Other Income - Net                                   54,687     147,164

  Income Before Tax Expense                                 625,808     318,328

Income Tax Expense                                          223,825     102,000

  Net Income                                             $  401,983  $  216,328

Basic Net Income Per Common Share                        $      .08  $      .05

Diluted Net Income Per Common Share                      $      .08  $      .04

Weighted Average Common Shares Outstanding - Basic        4,815,872   4,850,141

Weighted Average Common Shares Outstanding  Diluted       4,977,520   4,925,141


See Notes to Consolidated Financial Statements.



                                        3

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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------



                                                            Six months ended
                                                              December 31,
                                                          2 0 0 1     2 0 0 0

Operating Activities:
  Net Income                                            $  401,983  $  216,328
  Adjustments to Reconcile Net Income to Net Cash:
   Depreciation and Amortization                            61,474      89,877
   Provision for Doubtful Accounts                          39,726    (138,000)
   Discounting for Deferred Charge                              --     104,105
   Deferred Income Taxes                                        --      95,737

  Changes in Assets and Liabilities:
   (Increase) Decrease in:
     Accounts Receivable                                (3,316,543)   (485,380)
     Inventory                                            (552,856)    321,339
     Other Current Assets                                  146,193     (44,620)
     Other Assets                                           (1,194)     (1,958)

   Increase (Decrease) in:
     Accounts Payable and Accrued Expenses                (474,591)   (925,654)

   Total Adjustments                                    (4,097,791)   (984,554)

  Net Cash - Operating Activities                       (3,695,808)   (768,226)

Investing Activities:
  Capital Expenditures                                    (117,961)    (71,972)

Financing Activities:
  Floor Plan Payable- Net                                 (289,928)    971,906
  Treasury Shares Repurchased                                   --     (56,250)

  Net Cash - Financing Activities                         (289,928)    915,656

  Net (Decrease) Increase in Cash and Cash Equivalents  (4,103,697)     75,458

Cash and Cash Equivalents at Beginning of Periods        6,301,210   5,208,558

  Cash and Cash Equivalents at End of Periods           $2,197,513  $5,284,016




See Notes to Consolidated Financial Statements.


                                        4

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TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
------------------------------------------------------------------------------




[1] Summary of Significant Accounting Policies

[A] Consolidation - The consolidated  financial  statements include the accounts
of  the  Corporation  and  its  wholly  owned   subsidiary,   Century   American
Corporation.  Intercompany  transactions  and accounts  have been  eliminated in
consolidation.

[B]  Inventory  -  Inventory  consists  of  finished  goods.  The  Corporation's
inventory is valued at the lower of cost  (determined on the average cost basis)
or market.

[C] Cash and Cash Equivalents - For the purposes of the statement of cash flows,
the  Corporation  considers  highly liquid debt  instruments,  purchased  with a
maturity of three months or less, to be cash equivalents.

[D]  Earnings  Per  Share -  Earnings  per  common  share - basic  are  based on
4,815,872 weighted shares outstanding for the period ended December 31, 2001 and
on 4,850,141 weighted shares outstanding for the period ended December 31, 2000.
Earnings  per common  share - diluted  are based on  4,977,520  weighted  shares
outstanding  for the period ended  December 31, 2001 and on 4, 925,141  weighted
shares outstanding for the period ended December 31, 2000.

[2] Income Taxes

The  Corporation  has a  deferred  tax  asset of  $101,406  and a  deferred  tax
liability of $29,704 based upon temporary timing differences including inventory
capitalization,  allowance  for  doubtful  accounts,  vacation  pay accruals and
depreciation.

[3] Reclassification

Certain items from the prior year's financial  statements have been reclassified
to conform to the current year's presentation.

In the opinion of management,  the accompanying unaudited consolidated financial
statements   contain  all  adjustments   consisting  only  of  normal  recurring
adjustments  necessary to present fairly the financial position,  the results of
operations and cash flows for the periods presented.

These  statements  should be read in conjunction with the summary of significant
accounting  policies and notes contained in the  Corporation's  annual report on
Form 10-K for the year ended June 30, 2001.




                                        5

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
[UNAUDITED]
------------------------------------------------------------------------------





[4] Related Transaction

On November 11, 1998,  the Company  executed an agreement to sell  approximately
6.32 acres of unimproved  real property in  Mountainside,  New Jersey (the "Real
Property") to W Realty LLC ("W Realty") for the appraised value of $1,000,000. W
Realty is a  partnership,  which at the time of sale  consisted of John J. Wilk,
Chairman  of the Board,  and Raymond J. Rekuc,  a Director of the  Company.  The
purchase price was payable  through a credit  extended by W Realty as sub-lessor
to the Company as  sub-lessee  for the  $410,000 of rent  payable by the Company
over  the last  two  years  of its  sublease  (through  February  2001)  for its
principal  facility in  Somerville,  New Jersey and a $590,000  promissory  note
executed by W Realty  payable in  installments  of $150,000 in February 1998 and
$440,000 in November  1998. The note was at an interest rate of 8% per annum and
was  secured by a mortgage on the Real  Property.  The  $150,000  payment due in
February 1998 was paid and $190,000 of the payment due in November 1998 was paid
with interest. Payment of the $250,000 balance was renegotiated under a new Note
which provides for payment of the principal on November 1, 2000,  which has been
extended  until  June 30,  2002,  at an  interest  rate of 6.5%.  At the time of
issuance of the new Note,  the Company  released its  mortgage  lien on the Real
Property in order to permit W Realty,  which now includes an unaffiliated  third
partner,  to lease the Real  Property to another  third  party.  In place of the
mortgage lien, the new Note is secured by the partnership  interests of W Realty
owned by Messrs. Wilk and Rekuc.






                      .   .   .   .   .   .   .   .   .   .



                                        6

<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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Results of Operations

Revenues  for the three  months  ended  December  31, 2001 were  $14,438,077  as
compared  with  $13,113,298  for the quarter  ended  December 31, 2000.  For the
quarter ended December 31, 2001 the Corporation  reported net income of $176,023
as  compared  with net income of $119,062  for the  similar  period in the prior
fiscal  year.  For  the  six  months  ended  December  31,  2001  revenues  were
$31,514,467,  as compared to $ 26,778,297reported  for the similar period in the
prior fiscal year,  with net income of $401,983 for the  six-month  period ended
December 31, 2001,  compared  with net income of $216,328 for the same period in
the prior  fiscal  year.  The  increase in  revenues in the three and  six-month
periods  ended  December 31, 2001 is due primarily to  significant  increases in
large scale projects  relating to security and IP telephony  installations,  and
project awards won by the Corporation.

The net income for the quarter and six-month  period ended  December 31, 2001 is
attributable  to the increase in  large-scale  projects,  as  referenced  above,
increased service revenues, and improved technical staff utilization and related
increases in profit margins on technical services.  Service and training related
revenues  are  significant  in their  contributions  to earnings  because  these
operations yield a higher profit margin than equipment sales. The net income for
the quarter and the six-month  period ended December 31, 2000, was the result of
increased volume of hardware sales as well as the increase in service  revenues.
For the  six-month  periods  ended  December  31,  2001 and 2000,  respectively,
revenues  from the  provision  of  service,  support,  outsourcing  and  network
integration were largely the result of the Corporation  renewing and/or entering
into service contracts with a number of large corporate  clients.  Most of these
contracts are short-term,  usually twelve months or less, and contain provisions
which permit early termination. Although the contracts generally contain renewal
terms, there is no assurance that such renewals will occur.

During the fiscal years discussed, the computer industry has experienced a trend
of decreasing  prices of computers and related  equipment.  Management  believes
that this trend will  continue.  Industrywide,  the result of price  erosion has
been lower profit margins on sales,  which require  businesses to sell a greater
volume of equipment to maintain past earning levels. Another result of the price
decreases has been intensified  competition  within the industry,  including the
consolidation  of businesses  through merger or  acquisition,  the initiation of
sales by certain  manufacturers  directly to the  end-user  and the  entrance of
manufacturers  into technical services  business.  Management  believes that the
adoption of policies by many larger corporate customers,  which limit the number
of vendors  permitted to provide  goods and services  for  specified  periods of
time, has further increased price competition.

The Corporation's  performance is also impacted by other factors,  many of which
are not within its control.  These factors  include:  the  short-term  nature of
client's  commitments;  patterns of capital spending by clients;  the timing and
size of new projects;  pricing changes in response to competitive  factors;  the
availability  and related  costs of qualified  technical  personnel;  timing and
customer  acceptance  of  new  product  and  service  offerings;  trends  in  IT
outsourcing; product constraints; and industry and general economic conditions.

To meet these competitive  challenges and to maximize the  Corporation's  profit
margin,  management has modified its marketing  strategy  during these years and
has  enforced  expense  controls.  Management  also  utilizes new trends such as
manufacturers'  direct  shipment  and billing of the  customers  in exchange for
payment to the  Corporation  of an "agency  fee" as a means to reduce  equipment
related costs while increasing profits.  Management believes that this approach,
although it may impact revenues, insulates the corporation from challenges which
may  accompany  sudden  price  decreases,   hardware   obsolescence  and  delays
collection of receivables.

                                        7

<PAGE>






Management's  current marketing  strategy is designed to emphasize  provision of
technical  services and sales of lower  revenue/higher  profit  margin  products
related to service and support operations.  In this regard, management continues
its  concentration  on sales of network and system  integration  products  which
yield higher profit margins.  Management's efforts include targeting commercial,
educational and governmental customers who provide marketplaces for a wide range
of products and services at one time, a cost-effective  approach to sales. These
customers  often do not have  their own  technical  staffs and  outsource  their
computer service requirements to companies such as TransNet. Management believes
it maximizes profits through concentration on sales of value-added applications;
promotion  of the  Corporation's  service  and  support  operations;  and strict
adherence to cost cutting controls. In light of the above, management emphasizes
and  continues  the  aggressive  pursuit  of an  increased  volume  of  sales of
technical service and support programs,  and promotion of its training services.
In the near term, the  Corporation  believes that product sales will continue to
generate a significant  percentage of the Company's revenues.  In addition,  the
Corporation's   buying   agreement   with  Ingram  Micro,   Inc.   enhances  the
Corporation's  competitive edge through product  discounts  unavailable  through
other sources.

With respect to selling,  general and administrative  expenses, due to increased
sales related costs, selling,  general and administrative  expenses increased to
approximately  13% of revenue for the quarter and but  decreased  to 11% for the
six month period ended  December  31, 2001 as a percentage  of higher  revenues.
Selling,  general and administrative expenses were approximately 12% of revenues
for the same time periods in fiscal 2001.

Interest income decreased in the 2001quarter and six-month period as compared to
the same periods in 2000 primarily due to the lower interest rates  available on
investments as well as lower amounts invested.

Liquidity and Capital Resources

There are no material commitments of the Corporation's capital resources.

The  Corporation  currently  finances a portion of its accounts  receivable  and
finances   purchases  of  portions  of  its  inventory  through   floor-planning
arrangements  under which such  inventory  secures the amount  outstanding.  The
amount due under this  financing  increased for the quarter and six months ended
December 31, 2001 due to an increase in hardware sales.  Inventory  decreased in
the quarter and six- month  periods  ended  December 31, 2001 as compared to the
corresponding  periods in the prior  fiscal year in response to these  increased
sales and the Corporation's agency model of sales.

Accounts  receivable and payable  increased for the quarter and six months ended
December31,  2001 as compared to the same periods in 2000 as a direct  result of
the increase in  revenues.  Cash levels  decreased  in the three and  six-months
ended  December 31, 2001 as compared to the  corresponding  periods in 2000 as a
result of expenses required to finance the increased hardware sales.

For the fiscal quarter and six months ended December 31, 2001, as in the similar
periods in the prior  year,  the  internal  resources  of the  Corporation  were
sufficient to enable the Corporation to meet its obligations.

In the first  quarter of fiscal 1998,  management  was apprised of an unasserted
possible claim or assessment involving the Corporation's  Pension Plan. The Plan
was adopted in 1981 as a defined  benefit  plan. In 1989,  various  actions were
taken by the  Corporation  to  terminate  the Plan,  to  convert it to a defined
contribution plan and to freeze benefit accruals. No filing for plan termination
was  made  with  the  Pension  Benefit   Guaranty   Corporation   (the  "PBGC").
Additionally,  a final  amended and restated  plan  document  incorporating  the
foregoing  amendments and other required amendments  including those required by
the Tax  Reform  Act of 1986 do not  appear to have been  properly  adopted.  In
addition, since 1989, it appears that certain operational violations occurred in
the  administration  of the Plan including the failure to obtain spousal consent
in certain instances where it was required.


                                        8

<PAGE>





The  Corporation  decided to (i) take  corrective  action  under the IRS Walk-in
Closing  Agreement Program ("CAP"),  (ii) applied for a favorable  determination
letter with respect to the Plan from the IRS, and (iii)  terminate the Plan. The
CAP program  provides a  correction  mechanism  for  "non-amenders"  such as the
Corporation.  Under CAP, the Corporation will be subject to a monetary  sanction
(which  could range from $1,000 to  approximately  $40,000).  In  addition,  the
Corporation was required to correct, retroactively,  operational violations, and
to pay any resulting  excise taxes and PBGC  premiums and penalties  that may be
due. In this regard,  in connection with settlement  negotiations  with the IRS,
during the December 2000 quarter the Corporation made a contribution to the Plan
and made  payment of specified  sanctions.  During the March 2001  quarter,  the
Corporation  finalized  a  settlement  agreement  with  the IRS and is  awaiting
resolution with the PBGC.

The matters  discussed in  Management's  Discussion  and Analysis and throughout
this report that are forward-looking  statements are based on current management
expectations   that  involve  risk  and   uncertainties.   Potential  risks  and
uncertainties  include,  without  limitation:  the impact of economic conditions
generally  and  in  the  industry  for  microcomputer   products  and  services;
dependence  on key  vendors and  customers;  continued  competitive  and pricing
pressures in the industry;  product supply shortages;  open-sourcing of products
of vendors,  including direct sales by manufacturers;  rapid product improvement
and technological  change, short product life cycles and resulting  obsolescence
risks; technological developments; capital and financing availability; and other
risks set forth herein.


                                        9

<PAGE>




                                    PART II.

                                OTHER INFORMATION


Item 6:  Exhibits and Reports on Form 8-K

A.  Exhibits - None required to be filed for Part II of this report.

B.  Reports on Form 8-K - None filed during the quarter for which this report is
    submitted.




                                       10

<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                    TRANSNET CORPORATION
                                  (Registrant)


                                    /s/ Steven J. Wilk
                                    Steven J. Wilk, President


                                    /s/ John J. Wilk
                                    John J. Wilk,
                                    Principal Financial and Accounting Officer
                                    and Chairman of the Board of Directors



DATE:  February 12, 2002



                                       11

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